Breedon Group LON: BREE said it delivered a “solid” first half of 2026 as momentum in Ireland and the United States offset continued weakness in Great Britain’s residential construction market.
The company reported a 5% increase in revenue, while like-for-like revenue rose about 3%, marking its first first-half like-for-like growth since 2023. Underlying EBITDA was flat compared with the prior year and slightly ahead on a like-for-like basis, with the EBITDA margin easing to 13.5%.
Chief Financial Officer James Brotherton said the group’s pricing actions, surcharges and hedging programs helped limit the near-term effects of the Middle East conflict on costs. Breedon also increased its interim dividend, citing cash generation and confidence in its long-term prospects.
Cash flow, investment and leverage
Breedon recorded a free-cash outflow of about £15 million in the first half, an improvement from an outflow of around £25 million a year earlier. Brotherton said the change principally reflected a well-controlled working-capital build.
Net indebtedness increased only modestly year over year, reflecting strong cash generation in the latter part of 2025, acquisitions and a higher IFRS 16 lease liability. Covenant leverage stood at 2.1 times, slightly below the level reported 12 months earlier.
The company expects full-year capital expenditure of £125 million to £135 million, up slightly from its March guidance and principally reflecting acquisitions. It expects working capital to represent a £20 million to £30 million outflow for the full year, while total cash dividend payments of £55 million are scheduled for the second half.
Breedon said it expects year-end net debt of around £650 million and leverage close to two times. Cash exceptional items, including acquisition and integration costs and Peak Cluster-related decarbonization initiatives, are expected to total £10 million to £15 million.
- Revenue from acquisitions contributed about £17 million in the first half.
- Aggregate and asphalt volumes improved, offsetting lower cement and ready-mix concrete volumes.
- Projects under way include a replacement Dublin asphalt plant, a Scottish cement rail head and expanded bitumen storage in St. Louis.
Great Britain remains pressured by residential weakness
In Great Britain, revenue was flat as surcharges broadly offset higher costs. Infrastructure project work supported the business, but lower ready-mix concrete volumes tied to the residential market weighed on profitability.
The company said ready-mix concrete volumes declined 8% from the first half of 2025. Its cement operations reported broadly flat earnings, while Breedon continued to pursue operational-excellence and self-help programs.
Brotherton said he did not expect meaningful underlying pricing in Great Britain during 2026, describing first-half pricing as entirely related to surcharges. He said a stable market would be needed before the company could secure broader pricing gains.
Breedon also reiterated its call for an effective U.K. Carbon Border Adjustment Mechanism from January 2027. The company said imports have increased and represented more than 30% of the market in the latest available data, while domestic producers face higher carbon and electricity costs resulting from U.K. policy choices.
The company highlighted a potential infrastructure opportunity in Scotland, where a £50 billion-plus renewables-related electricity-grid investment program could increase demand for construction materials. Breedon said the Beauly-to-Peterhead grid upgrade alone is estimated to require more than 4 million tons of aggregates.
Ireland and U.S. operations advance
Ireland delivered strong revenue growth, with both volume and pricing up by mid-single digits, supported by improved construction activity, delayed major projects from 2025 and an initial contribution from the Booth acquisition.
Profitability in Ireland was affected by an unscheduled cement mill shutdown at Kinnegad in May. Brotherton estimated the net opportunity cost at a couple of million pounds at the EBITDA level. The repair was completed on schedule, and the company does not expect a further effect this year.
Breedon reopened a quarry in County Sligo, continued work on the Dublin asphalt plant and completed the Booth acquisition, which added mineral reserves near the Dublin market.
In the U.S., like-for-like revenue and EBITDA both increased by mid-teens, with positive volume and pricing trends across product categories. More favorable weather than in the first half of 2025, along with healthy infrastructure and non-residential demand, supported trading. The company said it has also won initial contracts to supply materials for data-center projects in the Midwest.
Reported U.S. profitability included two loss-making winter months from Lionmark, acquired in March 2025, partly offset by an initial contribution from Falling Springs Quarry. Breedon said the St. Louis-area quarry is highly automated, has significant reserves and is being integrated as planned.
Outlook and acquisition priorities
Breedon said it expects continued positive momentum in Ireland and the U.S., supported by organic growth and contributions from completed acquisitions. In Great Britain, it expects infrastructure activity to provide some support, although market demand is forecast to decline for a fifth consecutive year and the timing of a recovery remains uncertain.
The company said it remains on course to deliver full-year results in line with current market expectations. Management said its near-term acquisition priority is likely to remain Ireland and the U.S., where it sees opportunities for bolt-on transactions.
Brotherton said the group estimates its cost base is approximately 40% fixed and 60% variable. While Breedon continues to pursue targeted efficiency projects, he said management does not want to cut costs in ways that could compromise its ability to benefit when markets recover.
About Breedon Group (LON:BREE)
Breedon Group plc, a leading vertically-integrated construction materials group in Great Britain, Ireland and the USA, delivers essential products to the construction sector. Breedon holds 1.5bn tonnes of mineral reserves and resources with long reserve life, supplying value-added products and services, including specialty materials, surfacing and highway maintenance operations, to a broad range of customers through its extensive local network of quarries, ready-mixed concrete and asphalt plants.
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